Getting to a better world is a marketing problem Your organization is doing important work. Amplify your impact story and reach your growth goals with Sparx Publishing Group’s purpose-driven marketing solutions.
Together, let’s create content to make the world better. Get in touch with us here: sparxpg.com
IN THIS ISSUE
THE FUTURE OF FOOD
12
BLENDER BITES Blender Bites takes its delicious blend of nutrition and convenience across North America
PLANT VEDA FOODS
With its plant-based dairy products flying off shelves, this conscientious company’s business outlook is soaring too
20
16
NABATI FOODS GLOBAL
Reach into retail, food service and international markets fuels expectations for strong growth in 2022
28
NEPRA FOODS
Innovation and exclusive technology underpin a business strategy achieving rapid sales growth
THE YUMY CANDY COMPANY
24 ZOGLO'S INCREDIBLE FOOD
32
Exclusive technology and decades of experience create a foundation for succes 4
|
THE FUTURE OF FOOD ISSUE
Healthy candy becomes a reality thanks to a team that does the right things for the right reasons
CONTENTS
LETTER FROM THE EDITOR | 6
PUBLISHER Sparx Publishing Group Inc.
WELCOME TO THE CSE | 8 Recently-listed companies that are sowing seeds of change in the global food system
sparxpg.com For advertising rates and placements, please contact (604) 488-1097 or advertising@sparxpg.com
TUNE IN | 9 CSE TV is your source for fantastic capital markets-driven video content SPOTLIGHT:
AN APPETITE FOR INNOVATION | 10 Bite-sized bits of wisdom from entrepreneurs who are helping shape the future of food THE EXCHANGE FOR ENTREPRENEURS PODCAST HIGHLIGHT:
THE FRESH FACTORY | 36 This plant-based B Corp is working to ensure the dinner table of tomorrow includes a healthy helping of greens SPOTLIGHT ON MARK FRANCIS | 42 Discussing mentorship, the future of food, and what's unique about Western Canada
GROUP PUBLISHER Hamish Khamisa EDITOR-IN-CHIEF James Black EDITORS Nikki Manthey Peter Murray ART DIRECTOR Elisabeth Choi DESIGNER Nicole Yeh WRITERS Uttara Choudhury Ritika Dubey Patrick Graham Giles Gwinnett Nikki Manthey Sean Mason Peter Murray ILLUSTRATOR Annik Lemire
Plant-Based Chicken Strips from Zoglo's Incredible
FREE DIGITAL SUBSCRIPTION Published by Sparx Publishing Group on behalf of the Canadian Securities Exchange. To receive your complimentary subscription, please visit go.thecse.com/Magazine and complete the contact form. To read more about the companies mentioned in this issue, visit blog.thecse.com or proactiveinvestors.com
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
|
5
One of the hallmarks of successful entrepreneurship is making room at the table for new ideas and perspectives. And, as we launch another issue of this magazine, I’m thrilled to share that our table at the Exchange for Entrepreneurs is poised to become considerably larger. Recently, the CSE proposed significant revisions to our listings policies. These changes, which are currently under review by Canadian securities regulators, would enable qualifying CSE-listed securities to be reclassified to a “non-venture” designation, allowing them access to similar benefits to comparable issues listed on larger Canadian stock exchanges. As we’ve witnessed countless times at the Exchange, when good ideas take hold, expansion can happen quickly. These new policies will not only help to create a more robust capital formation ecosystem, but they’ll also allow the CSE to grow in stride with public issuers across a variety of exciting sectors. And, on the subject of dynamic sectors, plant proteins and meat alternatives have enjoyed an almost meteoric rise in popularity over the past few years. This issue highlights six CSE-listed plant-based food companies who are not only having a significant impact on the answer to that age-old question of "What's for dinner?" they're also pioneering new solutions in a marketplace that's hungry for innovation and helping tackle climate change through environmentally conscious products and technology. As the world accelerates towards more sustainable and ethical choices, we believe that the plant-based food companies listed on the CSE will continue to demonstrate leadership and plant the seeds of innovation that will shape the future of food. Bon appetit, and enjoy this issue of Canadian Securities Exchange Magazine!
JAMES BLACK
FOLLOW US ON
Editor-in-Chief james.black@thecse.com
ON THE WEB
CSE TV Stay up to date on what's happening in the capital markets. Join our community of subscribers who tune in to CSE TV for insightful content about emerging industries like plant-based foods, and much more. Subscribe now: go.thecse.com/CSETV
6
|
THE FUTURE OF FOOD ISSUE
THE EXCHANGE FOR ENTREPRENEURS PODCAST Enjoy in-depth conversations with thought leaders and innovators on Season 2 of The Exchange for Entrepreneurs Podcast. You can find it on Apple Podcasts, Google Play, Spotify, Stitcher, YouTube, and iHeartRadio. Tune in: blog.thecse.com/cse-podcasts
WWW.CSELAW.CA 416.519.6886 100 Bass Pro Mills Drive, Vaughan, Ontario, L4K 1X5
WELCOME TO THE CSE
FUTURE-FOCUSED FOOD COMPANIES
Recently listed companies that are sowing seeds of change in the global food system
PLANET BASED FOODS GLOBAL
Planet Based Foods is focused on producing natural, low processed, and nutritional choices that are better for people and the planet. They currently offer a high quality, cost-efficient vegan meat alternative derived from hemp proteins.
Listing Date January 11, 2022
Learn more: https://go.thecse.com/CSE-New-Listing-PBF
THE FRESH FACTORY
The Fresh Factory is focused on accelerating the growth of the plant-based, clean-label food and beverage brands of tomorrow. As a B Corporation, The Fresh Factory is ESGfocused, and driven to make a lighter, greener impact on the environment, as well as a strong, positive impact on local communities and the food supply system as a whole.
Listing Date November 16, 2021
THE GOOD FLOUR CORP. Listing Date November 8, 2021
Learn more: https://go.thecse.com/CSE-New-Listing-FRSH
The Good Flour Corp. is a corporation committed to investing in companies that are dedicated to providing the best in gluten-free and plant-based food products. They currently provide flours and mixes that are designed to bring flavour, texture, versatility, and ease to the gluten-free kitchen. Learn more: https://go.thecse.com/CSE-New-Listing-GFCO
BOOSH PLANTBASED BRANDS
Boosh Plant Based Brands is a Canadian company bringing fast and convenient plant-based comfort foods to the whole family. Boosh believes that going plant-based doesn’t mean you need to give up your favourite foods or flavour.
Listing Date May 26, 2021
Learn more: https://go.thecse.com/CSE-New-Listing-VEGI
MORE CONTENT Enjoy interviews with the CEOs of these featured companies on CSE TV: youtube.com/CSETV
8
|
THE FUTURE OF FOOD ISSUE
TUNE IN
CSE TV is your source for capital markets insights directly from the view of Entrepreneurs
NEWLY LISTED ON THE CSE Welcome the newest companies to list on the Exchange for Entrepreneurs! This series features informative interviews with company leaders as they showcase their innovative ideas and begin their journey as a CSE-listed issuer. Watch the videos now on CSE TV.
THE EXCHANGE FOR ENTREPRENEURS PODCAST Stay up to date on important conversations in the capital markets. Plus, join industry leaders as they provide insight into interesting trends and developments across a variety of sectors. You can tune in on Apple Podcasts, Google Play, Spotify, Stitcher, YouTube, and iHeartRadio.
ESG IN THE CAPITAL MARKETS Sustainability and accountability are gaining momentum across all sectors and industries as companies increasingly turn to ESG. Learn about ESG fundamentals and trends via our virtual event, ESG in the Capital Markets. Watch Parts 1 and 2 on CSE TV now.
WEEKLY MARKET RECAP Learn about trending topics in the capital markets. Each week, the CSE’s Anna Serin and Bruce Campbell from StoneCastle Investment Management bring you impactful stories from the stock market, including CSE listed issuer news. Head to CSE TV on YouTube every Friday to watch the livestream.
MORE CONTENT ON CSE TV Get all the latest episodes by subscribing to our YouTube channel: youtube.com/CSETV
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
|
9
SPOTLIGHT
AN APPETITE FOR INNOVATION Bite-sized bits of wisdom from entrepreneurs who are helping shape the future of food
BRAELYN DAVIS
BILL BESENHOFER
CEO of Planet Based Foods Global (CSE:PBF)
CEO of The Fresh Factory (CSE:FRSH)
“We want to be a steward of hemp... Why not lean on something that’s not just good for us, but also good for the planet?”
“We are at the forefront of the [plant-based] food movement. And while it is going to take time, it is happening.”
Watch the full interview here: go.thecse.com/Newly-Listed-PBF
10
|
THE FUTURE OF FOOD ISSUE
Catch the entire podcast episode on CSE TV: go.thecse.com/CSE-Podcast-Bill-Besenhofer
AHMAD YEHYA
DONNA REDDY
COO of Nabati Foods Global (CSE:MEAL)
President of Plant & Co. Brands (CSE:VEGN)
“How do you solve the problems we have here on this planet? It starts with food… Consumers are already demanding healthier plantbased foods.”
“Plants have emerged as the guiding star of health and wellness in response to consumer concerns associated with meat and dairy products.”
Check out Episode 6 of Plant Protein: The New Age of Food here: go.thecse.com/Plant-Protein-Ep6
From Episode 5 of Plant Protein: The New Age of Food. Watch the full episode: go.thecse.com/Plant-Protein-Ep5
JULIANNE CURRAN
JESSICA MALACH
VP of Market Innovation at Pulse Canada
VP of Partnerships & Insights at Social Nature
“Producers in Western Canada have really benefited from... the advantages pulses bring in terms of... improving the quality of the soil and also enhancing yields of crops grown.”
“Who are the people behind these brands, and what is their sourcing of ingredients? Supply chain transparency is becoming even more of an interesting area for consumers.”
Watch this full episode of Plant Protein: The New Age of Food here: go.thecse.com/Plant-Protein-Ep2
Get more insights into plant-based marketing on Episode 9 of Plant Protein: The New Age of Food: go.thecse.com/Plant-Protein-Ep9
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
|
11
COMPANY PROFILE
PLANT VEDA FOODS With its plant-based dairy products flying off shelves, this conscientious company’s business outlook is soaring too By Uttara Choudhury
A
rmed with a master’s degree in computer science from California’s Northwestern Polytechnic University, Sunny Gurnani was working for tech giants like eBay. He was poised for a career in technology in Silicon Valley, but keen business sense and a kind heart led him to co-found a plant-based dairy company instead. Since its launch in 2019, Vancouverbased Plant Veda (CSE:MILK) has developed award-winning plant-based dairy alternatives. The firm’s cashew milk, dairy-free coffee creamers, lassi (drinkable yogurts) and PlantGurt cashew yogurts have landed on shelves in more than 200 stores, with demand outstripping supply. The engineer-turned-entrepreneur reveals that he and his wife committed to the vegan lifestyle epitomized by Plant Veda a decade ago. “My wife was expecting our first child and we had gone to a vegan restaurant in California. It had flashcards that described the way cows in
the dairy industry were treated,” says Gurnani, Plant Veda’s Co-Founder and Chief Executive Officer. “For cows to produce milk, they have to give birth, so the cows are constantly impregnated. When the calves are born, they are taken away from their mothers. Male calves are often killed straight after being born. My wife and I were expecting our first child – it was horrifying to see the animal cruelty.” Unsettled, Gurnani drilled deep into articles and documentaries on the dairy industry. Haunted by footage of animal cruelty, Gurnani, who was vegetarian in India, turned vegan and has since abstained from animal products like dairy and eggs. “I studied vegan diets and their nutritional value, and around a year before this information my father had died due to his heart condition. I felt such regret as my father could have reversed his heart disease by shifting to a whole food, plant-based diet,” says Gurnani.
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
|
13
From left to right: Vanita Gurnani, Sunny Gurnani, Mayur Sajnani
Sunny Gurnani Co-Founder and Chief Executive Officer
Vanita Gurnani
Co-Founder and Director of Product Innovation
Mayur Sajnani
Co-Founder and Chief Revenue Officer
Michael Yang President
Company
Plant Veda Foods Ltd.
CSE Symbol MILK
Listing date June 21, 2021
Website
plantveda.com
In 2012, Gurnani wanted to start his own company in the US, but his H-1B visa immigrant status had him tied in knots. Legally, the couple couldn’t launch a start-up in the US, so they built a certified organic plant-based dairy company called Go Vegan, and later Nutriva, in India, while holding down jobs in California. Go Vegan preceded Plant Veda and made soy milk, ice cream and tofu. “By day I was an engineer in Silicon Valley and at night I was running a plant-based dairy in India. My wife got a permit and was running a vegan food truck in California, where she started selling her plant-based lassis and yogurts.” Tired of waiting for US Green Cards, the enterprising couple immigrated to Canada with their business blueprint for Plant Veda. “We wanted to do well by doing good. A plantbased business is ethical, good for the planet and has several health benefits,” says Gurnani. “We decided to move to Vancouver and registered for Canada’s largest vegan and vegetarian show, the Veg Expo, even before reaching Canada. At Veg Expo on May 5, 2019, we launched Plant Veda’s drinkable yogurt cashew lassi in five different flavours.” Plant Veda’s breakthrough creamy lassi, a traditional yogurt drink cherished in South Asia, was the right product at the right place. It won the Veg Expo Product of the Year award in 2019 and
“We wanted to do well by doing
good. A plant-based business is ethical, good for the planet and has several health benefits. — GURNANI
the Clean Choice Award from Clean Eating Magazine in 2021. To be a heavy hitter in the $900 million specialty beverage market, Plant Veda has positioned itself as a “healthier, wholesome and sustainable” plant-based dairy company. “We don’t use artificial flavours. Our mango lassi is made with cashew yogurt and chunks of whole alphonso mango. Our lassi contains a special blend of 10 billion probiotics,” says Gurnani. Plant Veda’s lassi line of drinkable yogurts has five flavours: mango, blueberry, strawberry, saffron cardamom and turmeric ginger. Plant Veda Co-Founder Vanita Gurnani, Director of Product Innovation, says that working out how to emulate the texture, taste and appearance of the plant-based products took patience and good ingredients. “I was born and raised in Anand in Gujarat, which is the dairy capital of India. I grew up loving dairy products so after becoming vegan I was missing all these things. When we started Plant
invested considerable capital and effort to “ We’ve convert the facility to a fully plant-based innovation centre with designs, upgrades, equipment and processes best suited for plant-based beverage R&D and production. — YANG
14
|
THE FUTURE OF FOOD ISSUE
Veda it was very important to get the right taste and texture,” says Vanita. “We also wanted our products to be healthy and that’s why we always use wholesome ingredients such as Canadian maple and agave to lightly sweeten our products. There are no artificial sugars, high-fructose corn syrup or oils in our products. They are wholesome, tasty and healthy.” The Plant Veda Innovation Centre is a 25,000 square foot facility on Annacis Island in Delta, British Columbia. It’s a springboard for new product development and largescale production. The ongoing Phase 1 upgrade will bring annual yogurt production to 2.5 million litres, up from 100,000 litres. In a nutshell, the Delta facility will propel the production of $10 million worth of products a year, according to the company. By 2022, Plant Veda says that with “minimal additional upgrades” the facility will be churning out 15 million litres of product. The expansion could catapult Plant Veda’s annual revenue to $60 million in a few years, according to the company’s growth blueprint. In addition, the Delta facility will be a plantbased go-to-market hub for innovation, production and distribution. “We’ve invested considerable capital and effort to convert the facility to a fully plant-based innovation centre with designs, upgrades, equipment and processes best suited for plant-based beverage R&D and production,” says Plant Veda President Michael Yang. Yang says Plant Veda is developing “strategic partnerships with technology vendors” that could also make the Innovation Centre a co-manufacturing facility in Canada. Dairy is a $490 billion dollar market globally, and the alternative dairy sector is tipped to grow to over
MORE CONTENT ON CSE TV
Uttara Choudhury is a Senior Journalist at Proactive and has reported on financial markets, foreign policy and business from North America, Asia and Europe. She has worked for Agency France Presse, Forbes India, Business Standard and the Financial Times in London. Uttara is a contributing author of “Bazaar at Work: Women Who Write Their Own Rules,” published by Harper’s Bazaar.
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
ABOUT THE AUTHOR
Plant Veda Foods President Michael Yang is joined by his team as they open the day's trading session on June 30, 2021 – watch on youtube.com/CSETV
$52 billion by 2028 – a 156% leap from $22 billion today, according to Grand View Research. Ultimately, the popularity of Plant Veda’s lassi catapulted the firm’s products into Whole Foods. “We are growing our store presence and are in over 200 stores with more chains stocking Plant Veda products in Western Canada with UNFI, Pro Organics and Sysco as our distribution partners,” says Plant Veda Co-Founder and Chief Revenue Officer Mayur Sajnani. “We will expand our presence and expect strong growth in revenue in 2022 as we list our PlantGurt probiotic yogurt line in stores,” Sajnani adds. The PlantGurt product line was launched in November 2021 in three flavours: plain unsweetened, mango and blueberry. One tub of PlantGurt yogurt contains billions of probiotics. The recent boom in probiotic products reflects an effort to re-introduce bacteria believed to promote good health. The global probiotics market size is expected to reach $95.25 billion by 2028, according to Grand View Research. After establishing itself in Canada, it is coming time for Plant Veda to go full-circle and move into the US market. “As we expand geographically to the US from Canada, we are going to see explosive growth and are working on setting up a distribution centre with a third party in the US,” says Sajnani.
|
15
COMPANY PROFILE
BLENDER BITES Blender Bites takes its delicious blend of nutrition and convenience across North America By Patrick Graham
A
s with many a budding food-focused entrepreneur before her, it all began in the kitchen for Chelsie Hodge. Incorporating three smoothies into her daily diet had Hodge feeling sharp and energized. But on the flip side, preparing the healthy drinks with fresh ingredients took no small amount of time each day, and what did not get used ended up taking significant space in her refrigerator or being discarded. Leveraging her experience as a business development officer at plant-based protein and sport nutrition powerhouse Vega, Hodge made it her mission to reformulate what it means to make a smoothie. Her invention was a frozen “puck” containing everything required for a tasty, nutritious smoothie, save for a splash of water, soy milk or
16
|
THE FUTURE OF FOOD ISSUE
other dairy alternative. No fuss, no food waste, just a few seconds in the blender and the drink is ready to enjoy. Some four years later, Hodge’s clever creation is available in more than 850 grocery stores across Canada. And in September of last year, Blender Bites (CSE:BITE) became a publicly traded company, with founder Hodge at the helm as Chief Executive Officer. In Blender Bites’ first year, Hodge’s kitchen was the centre of production, her mother and aunts by her side to help make enough product to meet demand. While many makers of healthy foods look to specialty stores for distribution, Hodge saw the potential to go mainstream right out of the gate. Whole Foods Market and Fresh St. Market/ IGA, two of Western Canada’s largest grocery
Chelsie Hodge
Chief Executive Officer
Company
Blender Bites Limited
CSE Symbol BITE
Listing date
September 21, 2021
Website
blenderbites.com
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
|
17
store chains, were the first major retailers to embrace the pre-portioned smoothie. Safeway, Sobeys, SaveOn-Foods and other leading grocery brands weren’t far behind. “The freezer category was just dying for innovation,” Hodge explains. “There’s this mindset amongst consumers that frozen is unhealthy and fresh is so much better. Education is needed to change people’s minds, as frozen actually has more nutrition most of the time because it is flash frozen.” Blender Bites is innovative when it comes to packaging as well, by being minimal rather than fancy. This commitment to respecting the environment complements the nutritional profile of the product, which is certified organic, vegan and non-GMO. With gluten, dairy, soy and added sugars absent from the ingredient list, Blender Bites are perfect for consumers with food intolerances, too. Today, Hodge says Blender Bites is growing “very rapidly” after launching into Costco in Eastern
18
|
THE FUTURE OF FOOD ISSUE
Canada with reformulated and rebranded products in three lines: green dtox, power berry and vita smoothie. The products are currently available at Costco locations in Ontario, Quebec and the Maritimes. Just how rapidly the business is expanding became clear recently when the company announced a 990% year-on-year increase in purchase order volume for December 2021, to $495,000. Demand was strong all around, with orders also coming in from existing and new club stores carrying the brand, plus many of the Canadian retailers with Blender Bites already on their shelves. With a well-established, and growing, presence in Canada, Blender Bites has its sights set on the US market. It announced its first order from “the world’s leading club store chain” in December and expects more US club stores to begin carrying Blender Bites soon. Costco Wholesale warehouses in Texas, Louisiana and Oklahoma are the first of the chain’s US locations to carry the products. A direct-to-consumer platform for the US market is also in the works.
“There’s this mindset amongst
consumers that frozen is unhealthy and fresh is so much better. Education is needed to change people's minds, as frozen actually has more nutrition most of the time because it is flash frozen. — HODGE
“We’ve come a long way in a short
time and when I think about our products being enjoyed by people right across North America, I’m really proud of our team. — HODGE
Hodge notes that another big opportunity for Blender Bites is in the food service industry, which includes restaurants, cafes and hotels where smoothie drinks are popular but time-consuming to prepare. “They just don’t have the people to sit there and chop up the fruits and vegetables or take ingredients and make a recipe for a smoothie,” says Hodge. “Blender Bites is a solution that could be extremely lucrative.” Financially, the company is getting stronger as well. It raised just under $3.9 million as part of its go-public transaction last September. The shares are also listed on the Frankfurt exchange and the company is eyeing a listing on the OTC market in the US. For 2022, Blender Bites is targeting between $6 million and $7.5 million in annual revenue as big name retailers embrace its products. “We’ve got accounts like Kroger and Albertsons and Wegmans and Walmart and Target on our list for retail for the US and we are focusing on the bigger accounts,” Hodge says. “Public companies like to acquire other brands and as soon as I’ve built up the team a little more, I think we’d have the capacity to look at that down the road. It is in the plans for the company, for sure.”
MORE CONTENT ON CSE TV
Since the 1990s, Patrick Graham has worked for the Associated Press, Dow Jones Newswires and The Wall Street Journal as a reporter, editor and manager. He helped launch and oversee WSJ. com’s Wealth Adviser vertical to provide exclusive content for wealth managers, financial advisors and financial planners. Patrick today specializes in investing, personal finance and retirement coverage.
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
ABOUT THE AUTHOR
Blender Bites Limited CEO Chelsie Hodge is joined by her team as they open the day's trading session on September 23, 2021 – watch on youtube.com/CSETV
For the current year, though, the Blender Bites CEO plans to remain focused on further market penetration and expansion into food service, retail and club stores. “We’ve come a long way in a short time and when I think about our products being enjoyed by people right across North America, I’m really proud of our team,” says Hodge. “But there is so much opportunity to expand market share and penetrate huge new sales channels that I feel we’re really only just getting started.”
|
19
COMPANY PROFILE
NABATI FOODS GLOBAL
Reach into retail, food service and international markets fuels expectations for strong growth in 2022 By Sean Mason
20
|
THE FUTURE OF FOOD ISSUE
C
onsumers are making a conscious choice to eat more plant-based foods, both from a personal health perspective and to lessen their impact on the environment. Recently listed Nabati Foods Global (CSE:MEAL) is well positioned to benefit from this trend by providing natural, plant-based, gluten- and soy-free foods for consumers who make healthy eating a priority. Operating since 2014, the family-founded food technology company has four signature product lines: dairy free cheesecakes, cheese alternatives, plant-based meats and a plant-based liquid egg alternative. “There are a lot of consumers, so-called flexitarians, that are plant-based-curious and want to dip their toes into the water for the first time,” Nabati Foods interim Chief Executive Officer Michael Aucoin tells Canadian Securities Exchange Magazine. “And for us, that means providing the best experience possible – designing our products with great flavour and providing great product delivery.” Aucoin brings more than 25 years of consumer packaged goods experience to his role, including as former Vice President of Sales at Hershey Canada. Nabati is relying on Aucoin’s expertise to help the company achieve its next phase of growth. That growth is being driven by rising consumer demand for plant-based foods. In the United States, the market is valued at US$7 billion and
“There are a lot of consumers,
expanded by 27% in 2020, according to the PlantBased Foods Association. Interestingly, growth topped 25% in all US census regions, underscoring that the shift to healthier food choices is very broad-based in nature. Nabati has already established first-mover advantage in one part of the Canadian marketplace with its Nabati Plant Eggz, a plant-based egg alternative that is free of all major allergens. The product is gluten-free, soy-free, cholesterol-free, vegan, kosher and made without genetically modified organisms (GMOs) or refined sugar. Unlike other plant-based food producers that focus solely on the retail consumer, Nabati can also
so-called flexitarians, that are plant-based-curious and want to dip their toes into the water for the first time. And for us, that means providing the best experience possible – designing our products with great flavour and providing great product delivery. — AUCOIN
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
|
21
Michael Aucoin
Interim Chief Executive Officer
Ahmad Yehya
Co-Founder & COO
Company
Nabati Foods Global Inc.
CSE Symbol
MEAL
Listing date
October 4, 2021
Website
invest.nabatifoods.com
22
|
THE FUTURE OF FOOD ISSUE
tailor its packaging to meet food service industry needs, a market segment that Aucoin says the company is attracting strong interest from, particularly due to the innovative nature of its products. “A great example of this is our team being able to develop a cheese product that really mimics pizza cheese in terms of milk quality, which isn’t always the case with plant-based cheeses, so we’re pretty excited about that,” Aucoin says. According to Aucoin, the key to growing the company’s revenue is building a distribution network, and to that end Nabati already has products featured in more than 700 locations across North America. Some of its more recognizable nationwide retailers in Canada include Sobeys, Metro, Safeway, Whole Foods and online at Costco.ca, as well as food service outlets such as Cobs Bread and Mucho Burrito. “The company has established distribution in South Korea, with other countries about to come on board,” Aucoin adds. In October 2021, Nabati announced that it was partnering with Nanum Foods to distribute Nabati
Plant Eggz and dairy-free cheesecakes to retail stores in South Korea and Vietnam. The products will be sold in Asia under the brand ITABAN. Also in October, the company said it was partnering with IMCD Japan, a leading specialty chemicals and food ingredients distributor, to distribute Nabati’s full product line in Japan. The partnership will focus on distribution via food service, industrial and grocery channels. “It’s about taking those great products and putting them in front of more consumers, building out our marketing plans to be able to communicate the quality of those products, and finding ways to have people sample. I think that’s one of the big opportunities across plant-based products,” Aucoin explains. Aucoin says that Nabati has an innovative R&D team to determine how the company can evolve its product
portfolio beyond the current four categories and capitalize on the next big plant-based food idea. Over the next year, the interim CEO says he wants to see Nabati deliver “dramatic” revenue growth to a point where gross margin dollars translate all the way to the bottom line. “If you look at what our team’s done the last six to nine months, they’ve set up the business from an operational standpoint where we have material availability now to ship significantly more, which is a very good setup,” Aucoin says. He adds that from a capacity perspective, the Nabati team has also been mindful of securing adequate inventories of strategic ingredients, as there’s been concern within the industry about availability of these crucial inputs. In the longer term, Aucoin wants the company to continue to understand where the consumer is going and to enhance its brand to become an unquestioned leader in the plant-based space.
“It's about taking those great
products and putting them in front of more consumers, building out our marketing plans to be able to communicate the quality of those products, and finding ways to have people sample. I think that's one of the big opportunities across plantbased products. — AUCOIN
“In five to 10 years, we’ll have a material footprint in other major markets around the world, continue to evaluate whitespace opportunities from an R&D perspective to broaden our product line, and build upon our past success,” Aucoin concludes. “We’re very bullish about our future.”
ABOUT THE AUTHOR
Sean Mason has been covering North American equity markets for more than 20 years, including for publications such as Investors Digest of Canada. He is a graduate of the University of Toronto and has successfully completed the Canadian Securities Course.
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
|
23
COMPANY INTERVIEW
NEPRA FOODS Innovation and exclusive technology underpin a business strategy achieving rapid sales growth By Giles Gwinnett
ProPasta is Nepra Foods' new line of consumer products.
24
|
THE FUTURE OF FOOD ISSUE
N
epra Foods (CSE:NPRA) went public in September 2021 in an oversubscribed $7.5 million IPO that underlined the interest in plantbased meat, a market which, according to Bloomberg Intelligence, could top US$162 billion in size by 2030. The company has its roots in the gluten-free ingredients sector and is led by food industry veteran David Wood, whose grandfather started a butchers’ supply business in the 1930s. Wood and partner Chadwick White, a master baker and now Chief Innovation Officer and Co-Founder of Nepra, were involved in the success of Udi’s Gluten Free Foods and Gluten Free Baking Solutions. Nepra was born from a desire to create a consumer brand business using the company’s own innovative formulations. Today, it is a vertically integrated group, producing and selling multiple products across four segments: proteins, dairy alternatives, baked snacks, and spreads and ingredients. Sales in the nine months to September 30, 2021, totaled C$4.26 million, up from $1.75 million in the year-earlier period. Canadian Securities Exchange Magazine spoke to Wood, the company’s Chief Executive Officer, to find out what he anticipates the next phase of the Nepra story will look like. Why do you think there is such a big move toward healthy foods and plant-based meat alternatives?
I think people have different reasons. Obviously, the environment is one big one. A lot of people want to do whatever they can and raising animals in the way we do is not the best for the environment. I also think the pandemic has brought on people’s concern about their personal health and they realize that what they eat is instrumental to how they feel. When people go plantbased, most of them don’t go fully vegetarian or vegan. They just eat more plants and less meat, and I think when they do they find out that they feel better. Their immune system response is better and their digestive systems work a bit better. And then there’s the animal cruelty side that a lot of people are concerned about, and just how we treat animals in general. Tell us more about your proprietary THP (textured hemp protein). What is it? How did you get into it? Why is it such a game-changer?
When you make a meat alternative, you’re taking the protein from the plant and you have to texturize it to give it a similar texture to an animal product. Mostly
it’s done with soy. But now they are texturizing all sorts of things – pea and chickpea and fava bean. But we are texturizing hemp, and as far as we know we’re the only ones currently doing that and we’re having really good luck. The biggest advantage is the flavour. Soy has an off flavour so you’ve got to cover that up when you make products out of it, and you end up using a lot of salt and other ingredients. Hemp has a very mild flavour. When we texturize it, the base product actually has a turkey flavour so it’s much easier to formulate meat analogues out of. Soy has some negative health aspects to it, too.
“When people go plant-based,
most of them don't go fully vegetarian or vegan. They just eat more plants and less meat, and I think when they do they find out that they feel better. — WOOD
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
|
25
David Wood
Chief Executive Officer
Chadwick White
Chief Innovation Officer and Co-Founder
Company
Nepra Foods Inc.
CSE Symbol NPRA
Listing date
September 16, 2021
Website
neprafoods.com
“And that's how we came across
is a good source of protein, or we also came out with snack items like pretzels.
Top: The R&D team, Clay White, Chadwick White and Marc Olmsted. Right: David Wood.
The reason we got into hemp isand that our historical working with hemp found business is ingredients in the gluten-free out that it's very functional.space, Notso when you take gluten out of a product you have to onlyitdoes it haveAnd good avour, replace with something. that’sflhow we came it's functional when you bake across working with hemp and found out that it’s very functional. Not only food does it have good flavour, with it or make products it’s functional when you bake with it or make food out of it. — WOOD products out of it. It has a similar structural quality to eggs. You can take hemp protein and whip it into a meringue, The reason so this we got really into gives hemp us an is that advantage our historical on the food development business is ingredients side to in come the gluten-free up with new space, prodso ucts. As when you wetake started gluten playing out ofwith a product it more, you wehave found to that not itonly replace with could something. we use itAnd for baking, that’s how but we could came also make across working a lot ofwith other hemp products and found out of out it. that it’s very Meat functional. analogues Not only are only does it one have category. good flavour, New products it’s functional we’rewhen coming youout bake with with include it or make spaghetti food and meatballs, products out of ait.frozen It has afood similar linestructural and a pasta quality line. Theggs. to e spaghetti You canistake actually hempmade protein outand of hemp whip itasinto wella because it’ssohigh meringue, this in really protein, gives us high an in advantage fibre andonvery the healthy. food development So, as people sideeat to come more up plant-based with new proddiets, they’ve ucts. Asgot we to started comeplaying up withwith goodit protein more, we sources. found Andnot that they only don’t could necessarily we use it for want baking, to eatbut things we could that look make also like meat. a lotWe’ve of other gotproducts formulations out of like it. pasta that is aMeat good source analogues of protein, are only or we one alsocategory. came out New with snack items products we’re likecoming pretzels.out with include spaghetti and meatballs, a frozen food line and a pasta line. You $7.5ismillion in made your IPO. are you goThe raised spaghetti actually out How of hemp as well ing to use these funds to grow the business? because it’s high in protein, high in fibre and very The company healthy. So, as was people founded eat more in 2016 plant-based and ourdiets, core businessgot they’ve is to ingredients. come up with We import good protein and distribute sources. ingredients And they don’t to all necessarily kinds of manufacturers want to eatacross thingsNorth that America. look like meat. We’reWe’ve growing got formulations that businesslike andpasta because that supply chains are a problem, especially when you’re
26
|
THE FUTURE OF FOOD ISSUE
You raisedproducts $7.5 million bringing in in your IPO. How are you going to use these funds to grow the business?
from overseas, we’ve used Th e company some of that wascapfounded in 2016 and our core ital to increase business is ingredients. invento- We import and distribute ry, just so wetocan ingredients all kinds weather of manufacturers across North some of theWe’re America. shipping growing delays. that business and because We’rechains also building out ourespecially when you’re supply are a problem, facility inproducts bringing Colorado in from to produce overseas, we’ve used some more of thatofcapital the textured to increase hemp inventory, protein just andso more we of our high-protein can weather some flour.of We’re the shipping currentlydelays. selling hemp flour thatWe’re is used also in building baking that’s out about our facila 55% protein content.inAnd ity Colorado we’re putting to produce in a pilot more production line so wethe of cantextured produce the hemp ProPasta protein meals and here in our facility in Colorado more of our high-protein to a point. When flour.we really get into big distribution, We’re currently selling then we’ll hemp go fltoour a co-manufacturer that has that is used largerinlines baking thatthat’s can build about the ProPasta meals. aWe’ve 55% also protein hiredcontent. a lot of staff And. We’ve we’re had to bring on quality control putting in a pilot people production and commercialization line so people. So that’s we can produce been some theofProPasta the spend meals as well. here in our facility in Colorado to What other news should a point. When we really getinvestors expect in the short to medium term? into big distribution, We’vewe’ll then announced go to athe launch of our ProPasta line. Our big retail push is going to be in March, when co-manufacturer there’shas that a biglarger trade show in the US that is the place to bringthat lines your products can to market and get in front of all thethe build retailers. ProPasta meals. ThenWe’ve we’vealso got some new meat alternative products we’re hired a working lot of on. We’re finishing the purchase of the equipment staff . We’vefor that. We will have some products coming had to bring out probably on toward the middle of next year. quality The other control thing we’re working on is the egg replacement capability that hemp has. In the food
David Wood
Chief Executive Officer
Chadwick White
Chief Innovation Officer and Co-Founder
Company
Nepra Foods Inc.
CSE Symbol NPRA
Listing date
September 16, 2021
Website
neprafoods.com
“
industry, when big food companies use eggs, they Top: The R&D team – Clay White, Chadwick White and Marc Olmsted. Right: David Wood. usually don’t use liquid eggs, they use egg powder And that's how we came across and normally egg white powder. But because it’s an allergenand people and commercialization because it’s an animal people.product, So that’s been a lot game-changer working bewith hemp and found some of manufacturers the spend as well. cause it will be a of food want to get rid of it. We’ve out that it's very functional. Not developed an egg white powder replacement using unique product. What other news should investors expect in the only does it have good flavour, hemp that will sell commercially. We use it in our Th ere are very few short to medium term? own products, but we’ll also sell it. That’s going to be plant proteins that when you bake it's functional a game-changer We’ve announced because the launch it willof beour a unique ProPasta product. line. can mimic so this food products with it eggs or make Therebig Our areretail very few push plant is going proteins to be thatincan March, mimicwhen eggs is going to be a big item for — WOOD out ofB2B it. side. so this is there’s a going big trade to beshow a big in item thefor USusthat on the is the B2Bplace side. us on the to bring your products to market and get in front of What would you say to investors looking at this all the retailers. What sayNepra to investors looking at this space?would Whatyou makes Foods stand out? Then we’ve got some new meat alternative prodspace? What makes Nepra Foods stand out? ucts we’re working on. We’re finishing the purchase of You look for innovation, you look for companies that the equipment for that. We will have some products Youmeeting are look for the innovation, needs of you consumers, look for and companies consumers that coming out probably toward the middle of next year. are meeting looking for thenutrition needs of consumers, and taste and and texture. consumers A lot The other thing we’re working on is the egg reof plant for protein companies areand using old ingrearethe looking nutrition and taste texture. A lot placement capability that hemp has. In the food of the –plant dients soy or protein gluten.companies It’s not very are innovative. using old Iingrethink industry, when big food companies use eggs, they adients lot of– companies, soy or gluten.too, It’s ifnot you very look innovative. at small Ipublic think usually don’t use liquid eggs, they use egg powder a lot of companies, companies, don’t have too, revenue, if you look or at have small very public low and normally egg white powder. But because it’s an companies, revenue. Wedon’t are not have a new revenue, company. or have We’ve verybeen low allergen and because it’s an animal product, a lot revenue.forWe around years are and not we’ve a newgot company. existing revenue We’ve been and of food manufacturers want to get rid of it. We’ve aroundgot we’ve formultiple years and revenue we’ve got streams existing because revenue we and sell developed an egg white powder replacement using we’ve got multiple ingredients B2B. And revenue thenstreams we alsobecause have our weown sell hemp that will sell commercially. We use it in our ingredientsside. consumer B2B. I think And then it really wegives also have us a leg ourupown for success in the own products, but we’ll also sell it. That’s going to be a consumer side.future. I think it really gives us a leg up for success in the future.
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
ABOUT ABOUT THE THE AUTHOR AUTHOR
Giles Gwinnett is a UK-based journalist who has been with Proactive for 10 years, and on its North Giles Gwinnett is a UK-based who has withfor Proactive 10at years, and newspapers on its North American coverage team for fijournalist ve. Prior to that hebeen worked several for years regional American coverage team for fi ve. Prior to that he worked for several years at regional newspapers and for a news agency. Giles has written about a wide variety of business and other topics in his and for including a news agency. Giles has written about a wide variety of business and other topics in his career, the arts, crime and politics. career, including the arts, crime and politics.
|
27
Erica Williams
Founder and Chief Executive Officer
Company
The Yumy Candy Company Inc.
CSE Symbol TYUM
Listing date July 9, 2021
Website
yumybear.com
28
|
THE FUTURE OF FOOD ISSUE
COMPANY INTERVIEW
Healthy candy becomes a reality thanks to a team that does the right things for the right reasons By Peter Murray
I
n today’s food and beverage marketplace, consumers demand healthy choices in all product segments. Candy is an item defined in many people’s minds by recipes laden with sugar, which is not exactly what one tends to associate with good health. But change is underway, and at the vanguard of this evolution is Erica Williams, Founder and Chief Executive Officer of The Yumy Candy Company (CSE:TYUM). Vancouver-based Yumy Candy Company is a leader in better-for-you candy, not only because it is an emerging category ripe for new entrepreneurs, but also because it fits the kinds of goals that Williams and her team are committed to accomplishing. In a wide-ranging interview with Canadian Securities Exchange Magazine in early December, Williams discussed her strategy for launching The Yumy Candy brand, the market it plays in, and why the company’s products are already segment leaders. The better-for-you category is self-explanatory on the surface. But how big is this segment of the food and beverage industry and what drives a successful product and brand?
The better-for-you confectionery market is just getting started. It is not a trend. I think that is the number one thing I am asked. We are the first and only vegan and better-for-you confectionery company to go public, which is a huge accomplishment, and it gives investors an opportunity to invest in the future of the confectionery sector.
I think we will see more and more better-for-you candy companies IPO, as this is a growing space and still has lots of upside potential. The better-for-you space has been growing substantially over the last five years. I’ve seen it with the shift from high-sugar products to low-sugar alternatives, and then it was from meat and dairy to vegan options, with initially the plant-based meat, and now the plant-based dairy industry taking off. I believe the vegan confectionery sector is just at the beginning of its growth. In 2020, the global health and wellness food market was valued at US$733 billion and projected to increase to $1 trillion by 2026. In 2019, the sugar-free market in the US alone was a $1.88 billion industry. Over 60% of consumers say that working toward a more plant-based diet is the trend they are looking for. What drives a successful brand is a winning product and a winning team, and I think we have both. At the end of the day, it comes down to what the consumer wants, and listening to what they are looking for. Innovation is key and that’s exactly what we’re doing here at The Yumy Candy Company.
“Over 60% of consumers say that working toward a more plantbased diet is the trend they are looking for. — WILLIAMS
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
|
29
COMPANY INTERVIEW
Candy is a large and competitive market segment. What advantages do Yumy Candy products have? How did you decide on these and then develop products based on that insight?
I’ve been in the health and wellness space for a long time and have my finger on the pulse of what people are looking for, and that is essential to give your brand that edge. One of the biggest competitive advantages is that we are really focused on taste and texture. Not only are Yumy Bears the best tasting, but they are also much softer and don’t get stuck in your teeth like other candies. You no longer have to sacrifice taste and satisfaction when choosing a better-for-you candy. Going into our launch, we did extensive market research in the confectionery space and it showed that consumers are looking for new vegan and environmentally sustainable options that are better for human health and animal welfare. We realized there was a significant gap on the shelves. Being one of the first better-for-you alternatives in the aisle has given us a huge competitive advantage. Companies like Hershey’s and Haribo are
“Going into our launch, we did
extensive market research in the confectionery space and it showed that consumers are looking for new vegan and environmentally sustainable options that are better for human health and animal welfare. — WILLIAMS
30
|
THE FUTURE OF FOOD ISSUE
slowly starting to make adaptations to come into the space, but hopefully by that time we have claimed the unclaimed market share. The second competitive advantage of our products is that we are up to 92% less sugar than traditional candy. There is a huge trend toward low-sugar items. Most people are aware of how overconsumption of high-sugar products has negative impacts on overall health, especially for children. And the third competitive advantage we identified is the movement away from sugar alcohols and artificial sweeteners, because they have been shown to influence blood sugar levels. We cater to the demand for great tasting, naturally sweetened products without using any sugar alcohols or artificial sweeteners. And then over the last two years, immunity and health has been at the top of people’s minds. Consumers are becoming more conscious of what they are putting into their body and that is another reason we are seeing people gravitate toward healthier confectionery options. The distributors you utilize supply many of the largest food and pharmacy retailers in Canada. How extensive do you see distribution of your products becoming in terms of store numbers and over what period?
We wanted to make sure we partnered with distributors that have strong retail partners. We recently partnered with a couple of Canada’s largest distributors of quality health and confectionery products. That will bring us significant growth in sales and increase market share. Working with distributors with all of the major retailers in Canada, such as Whole Foods, Loblaws, Sobeys
“The second competitive
advantage of our products is that we are up to 92% less sugar than traditional candy. — WILLIAMS
– they have distribution to over 7,000 vendor locations – we expect to be in thousands of locations in the next 12 months. One of our distributors has been the main factor in establishing and distributing many great brands and companies in the confectionery space, one of which was recently acquired for US$360 million in our direct better-for-you space. Star Marketing, our other main distributor, has won awards for their relationships with retail chains such as London Drugs. We are excited that The Yumy Candy Company is well on its way to gaining tremendous market share in a relatively short period of time. Walk us through sales to date and your marketing strategy. How important is brick-and-mortar retail compared to online sales?
Our sales strategy was to go directly to consumers. We wanted to get into the hands of consumers, let them taste the product and then let them decide. We conducted in-store product tastings, attended trade shows, went to local markets – every community event possible to get in front of our target customers. The feedback was overwhelmingly positive and we knew we had a winning product. Our sales strategy was to establish a strong retail presence in a short amount of time and that was really to start with brick-and-mortar retail, and that allowed us to grow across Canada and establish that strong retail presence. We also launched our e-commerce. Given recent events, people have stayed home and are looking to shop online, so we did them in tandem. We recently scaled into a large nationwide distributor, which allows us access to the large retailers in the country, as well as the largest volume of brick-and-mortar businesses. That has
Yumy Bear Goods Inc. CEO Erica Williams is joined by her team as they open the day's trading session on August 11, 2021 – watch on youtube.com/CSETV
It would be great to hear some of the feedback from retailers and consumers.
We’ve got a lot of positive feedback, which is amazing. One of our main sources is product tastings on social media and strong relationships with our retail partners. Everyone enjoys the delicious fruity flavours we offer and the soft and squishy texture that does not get stuck in your teeth. People also love the variety of low-sugar candy and that we are 100% vegan. Overall, people love to have healthy treats that they can enjoy and feel good about eating, and that’s what we’re all about at Yumy Candy.
“Being a young female founder, I knew it was important to be omnipresent throughout our marketing strategy. — WILLIAMS
Peter Murray oversees a national editorial and broadcasting team as President of Proactive Canada. He spent several years managing the English news desk at Nikkei’s head office in Tokyo and has worked with research teams at Asian and European investment banks. Peter is based in Vancouver.
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
ABOUT THE AUTHOR
MORE CONTENT ON CSE TV
brought us double-digit percentage growth each quarter and we expect to see that well into 2022 and beyond. Being a young female founder, I knew it was important to be omnipresent throughout our marketing strategy. We engaged in multiple layers of strategy, from influencer marketing with both macro influencers, or people with over a million followers, and micro influencers with more intimate but loyal followings. And we drove traffic through social media advertisements. We also leveraged tried and true methods such as traditional product tasting teams across the country, in-store print advertising, billboards, and physical guerilla marketing like vehicle wraps. We see both brick-and-mortar and online sales as important, with an obvious trend toward online shopping, which is why we are currently scaling to different online platforms using traditional and new technological methods such as obtaining a large Instagram and Facebook footprint, SEO, online PPC and geotagging. But our product is a convenient grab-and-go snack and will always excel in the grocery, pharmacy, convenience and retail channels which we will continue to expand throughout the leading national retailers.
|
31
COMPANY INTERVIEW
ZOGLO’S INCREDIBLE FOOD
Exclusive technology and decades of experience create a foundation for success By Ritika Dubey
T
he food industry is in the midst of a major shift toward plant-based alternatives, and consumers who already make plant-based foods part of their diet know that their flavour and texture has improved remarkably in the last few years. Some even taste just like meat. Ontario-based Zoglo’s Incredible Food (CSE:ZOG) pioneered the art of producing plant-based meat substitutes and knows the ins and outs of this fast-growing sector as well as any corporate team, having been in business for nearly 35 years.
The company’s secret to producing top-shelf, plantbased proteins lies in its disruptive technology, which consists of a new extrusion process that builds fibres in vegetable proteins. The technology enables a texture that Zoglo’s Chief Executive Officer Anthony Morello calls “the closest thing to traditional meats that we’ve ever seen.” Meanwhile, societal trends go hand in hand with Zoglo’s vision to become a global entity. Studies show that a vegan, vegetarian or flexitarian diet not only has health and environmental benefits, but also a noteworthy impact on lowering food costs. An Oxford University study revealed that a vegan diet can cost some 29% less than a meat diet, while the flexitarian diet was the next cheapest. In an early December interview with Canadian Securities Exchange Magazine, Morello explained how Zoglo’s leverages decades of experience to distinguish itself in an increasingly crowded marketplace. Zoglo’s has been in business for much longer than most of its competitors. What makes the company unique in the plant-based food market?
When Zoglo’s first began, we didn’t refer to these products as being plant-based, but rather we called them vegetarian. A lot of products were good, but frankly not great, because of the technology available at that 32
|
THE FUTURE OF FOOD ISSUE
“Over the last five years,
there's been a real technology shift allowing for plant-based products to come closer to the taste and texture of real meat. What makes Zoglo’s different is our technology. — MORELLO
time. Over the last five years, there’s been a real technology shift allowing for plant-based products to come closer to the taste and texture of real meat. What makes Zoglo’s different is our technology. A lot of our technology does not exist in North America yet. We have a distinct advantage over our competitors in the products that we’re making, which allows us to create a much wider assortment of options. What do you make of the growing attention around the plant-based industry? Do you think it’s a fad or is it here to stay?
This is not a trend or a fad. Through the course of my career, I’ve seen a lot of trends in the food industry, whether it be sugar-free or gluten-free, but this is a complete food shift. It doesn’t happen very often. We’re on the cusp of seeing something that is going to change the way people eat. There are three distinct groups of people that are looking towards plant-based as a solution for their dietary needs. Younger people, or Gen Z, are looking at it as a need to help the environment, or animal welfare.
Older people, like myself, are hearing our doctors tell us that we have to eat less red meat. In Canada, cultural reasons also play a part: so many people come from different facets of the world, where vegetarianism and veganism are a part of the diet. These three dynamics are making for a perfect storm of food development. Zoglo’s recently acquired plant-based food producer Monday Swiss UK. What was behind the decision?
We wanted to have its specialized extrusion process at our fingertips. It allows for the production of pea protein or soy protein in a way that will give you a similar experience to meat from a mouthfeel and texture perspective. This is a really distinct advantage because it opens up the category to a much broader audience and attracts flexitarian consumers. How are you planning to grow the business? Is it going to be organic growth or M&A?
There are going to be a lot of mergers and acquisitions in this space in North America over the next five to 10 years, but I think our growth will be a combination of both. Of all the different competitors we have in our space in North America, there’s a lot of small players that will likely not last. Other larger players are going to get into it in a bigger way, and already CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
|
33
From left to right: Jim Delsnyder, Pino Di Cerbo, Tony Morello
Kellogg’s is dabbling with Morningstar, and Conagra with Gardein. They’re all going to need some form of plant-based option within their portfolios. Also, plant-based options are going to appear more in the food service industry with restaurants. There’s great room here for growth and expansion, and certainly for M&A. We want to be the best that we can be in this space and carve out Zoglo’s as a brand that’s recognized globally. What are the industry trends you’re noticing in the plant-based food market, and how are you attempting to utilize them to the fullest?
Trends are developed by the consumer at the end of the day, and
“There is so much
news, attention and awareness around plant-based lifestyles, not only from a food perspective but also from environmental and health perspectives. — MORELLO
34
|
THE FUTURE OF FOOD ISSUE
wider acceptance of products is how the trends evolve. There is so much news, attention and awareness around plant-based lifestyles, not only from a food perspective but also from environmental and health perspectives. People are curious, and they’re continuing to evolve and develop their interests. Our position is a little different than most of our competitors because of the variety that we’re bringing to the market. We’re offering the consumer more options to incorporate plant-based foods into their meals and diets. Food is more expensive in grocery stores now. Have you found that inflationary pressures have affected your business?
If anything, plant-based food is going to become a more economical way to purchase food. The reality is the resources required to farm animals are getting more expensive. Again, the effect that it has on our climate and our soil is a challenge that we need to deal with. There is so much more stability in the cost of raw materials with plantbased ingredients. Because plant-based products have a stable pricing structure, consumers can know exactly what they’re going to pay week in and week out for groceries.
Anthony Morello
Chief Executive Officer
Jim Delsnyder
Chief Operating Officer
Pino Di Cerbo
Chief Culinary Officer
Company
Zoglo's Incredible Food Corp.
CSE Symbol ZOG
Listing date July 26, 2021
Website
zoglos.com
“If anything, plant-based food
is going to become a more economical way to purchase food. The reality is the resources required to farm animals are getting more expensive. — MORELLO
Have you had trouble with supply chain disruption, and if so how are you tackling that?
No, we haven’t experienced anything as of yet, which is quite remarkable because we’re currently bringing all of our products from Europe. We’re manufacturing all the products in Europe at Monday Swiss.
Our plan is to open a production facility in North America by the end of 2022, take the technology that we have in Europe and essentially cut and paste it in North America. That will do two things: it will ease the pressure of capacity in Europe so that we’ve got the capacity to continue to grow there, and it will give us more capacity in North America as we grow our brand and our product SKUs. With the acquisition of Monday Swiss, we have access to a facility in the northeast US. It’s the right size and the right footprint for what we need. We’re looking at the new facility as a potential location for us, and if not there then somewhere in southeastern Canada. Finally, are there any misconceptions about plant-based foods among people that you’d like to clear up?
The biggest misconception is that all plant-based food is created equal. We are a perfect example of that. We’ve been in the business for over 30 years. Our green box lineup was made with a different technology than the black box items we recently launched. If you taste and prepare those products like meals, the food experience is vastly different. It is important to read the ingredient decks, look at the cooking instructions, and make sure that you’re getting what you think you’re getting. There are a lot of counterfeit products out there. As time evolves, technology has allowed these products to get a lot better. Three years from now, it’s going to be much better again.
MORE CONTENT ON CSE TV
Ritika Dubey writes on Canadian and US equities out of Proactive’s Toronto bureau. She has experience covering mental health, drug policies, as well as legal, science, business and justice developments in the psychedelics industry. Ritika began her career as a multimedia journalist with the political magazine Outlook India.
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
ABOUT THE AUTHOR
Barrington Miller chats with Zoglo's CEO Tony Morello and COO Jim Delsnyder about the company's mandate to offer the finest quality plantbased products at an affordable price and their global intellectual properties to lead the industry in innovation – watch on youtube.com/CSETV
|
35
The Exchange for Entrepreneurs Podcast Highlight
THE FRESH FACTORY
This plant-based B Corp is working to ensure the dinner table of tomorrow includes a healthy helping of greens Growing up, a common phrase around the dinner table was: “Eat your vegetables.” Thanks to the plant-based food movement, eating those vegetables is not only the healthier and more environmentally-conscious choice, it’s also easier and tastier than ever. During a recent episode of The Exchange for Entrepreneurs Podcast, CSE Director of Issuer Engagement Barrington Miller chatted with Bill Besenhofer, Chief Executive Officer of The Fresh Factory (CSE:FRSH) about this “farm to shelf” company’s mission to accelerate plantbased, clean-label food and beverage brands. Here are some highlights from the episode.
36
|
THE FUTURE OF FOOD ISSUE
THE FRESH FACTORY AT A GLANCE
100 % OF WASTE IS COMPOSTED
40 %
OF PRODUCE IS LOCALLY SOURCED
1%
OF SALES DONATED TO THE LOCAL COMMUNITY
Barrington Miller: This is a great opportunity to showcase and highlight the first ever B Corp company that’s listed on the CSE. And in case our audience members don’t know what the Fresh Factory is, or who it is, or what it is you do, please feel free to share what your business is. Bill Besenhofer: Thanks again for having us. We’re so excited, obviously, to be on the CSE and working with you. And so what is The Fresh Factory? We’re a mission driven platform where we’re creating and investing in, and accelerating some of the food brands of tomorrow, the best food and beverage brands. When we think about those types of brands, we’re thinking about cleanlabel, fresh, plant-based products. What we’ve done is we’ve built this vertically integrated platform from farm to table. And that’s from innovation all the way to the end cycle of sales and marketing. We’ve built this platform to be able to provide clean-label, plantbased food, honest food for everyone.
Barrington Miller: Now obviously we’re in the midst of the global thing that we’re going through. How has that affected, no pun intended, the appetites for people who are either wanting to eat healthier, cleaner, greener, more eco-friendly, or the appetites for the investor who may start looking towards these types of things and products? Bill Besenhofer: It’s interesting that you say that. Luckily enough, we’ve been able to establish some really good products for a lot of our emerging brands, as well as a lot of our customers. What we’ve seen is a growth in that, because I think as you know, with the way of life where most people are spending more time at home, they’re
When we talk about what’s a B Corp... what that means is that we’re environmentally and socially focused. — Bill Besenhofer
not really getting out of the house. So there’s no exercise, there’s none of that. I think people have started to realize that, okay, we’ve got to move on. We’re a few years into this. We do need to make sure we’re continuing to eat healthy and making sure that we’re looking at what’s on the back of the labels and whatnot. And in that regard, that movement has been going on. I think what COVID did is accelerate it quite honestly, especially for some of the companies that are direct to consumer.
Barrington Miller: You are not the only company that’s in the space. There is so much buzz around clean eating, healthy eating, green eating. All of those things. What is one of your differentiators as a company from all the noise? Bill Besenhofer: I’d say being a B Corp. That’s really one of the things that, quite frankly, is a point that really differentiates us.
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
|
37
We’ve built this platform to be able to provide clean-label, plant-based food, honest food for everyone. — Bill Besenhofer When we talk about what’s a B Corp, what that means is that we’re environmentally and socially focused. I’ll give you some examples. We compost a hundred percent of our waste. So of all the waste that we have from our produce and things that we make, we compost all of that. We’re donating 1% of one of our brands, in sales. Nearly 40% of the produce is local to our facility. So basically, we’re finding ingredients and farmers, and 40% of that is within a very short distance from our facility. The other thing is, our team is extremely diverse. We’ve got 41% identifying as women and 84% as persons of colour. It’s about giving people a quality of living, and paying
more than minimum wage. That’s something that we take a lot of pride in each and every year, and making sure that we continue to uphold the B Corp certification.
Barrington Miller: Two part question on the B Corp. One, is it a hard designation to get? And two, the chicken and egg. Were you like, “Oh, I may as well go for the certification, because we’re already halfway there, or three quarters,” or was this top of mind when the company formed saying, “Okay, we want to be this type of company and stand out, and it’s going to be there from the start.” Bill Besenhofer: It is definitely not an easy designation to get. It’s funny because there’s so many different buckets, but in some cases you don’t even necessarily realize. And I think the evolution of the B Corp criteria has definitely changed over the years. I’d like to say that this is something that we live by and the way that we wanted to build the company in its own rights. So I think it was really more about being in line with exactly what a B Corp is. And we knew from the start that we did want to be a B Corp, but we were living our lives that same way. So it just made sense for us to kind of flow and process right through to a B Corp certified company, because that’s who we are as people.
WATCH THE FULL INTERVIEW on The Exchange for Entrepreneurs Podcast: go.thecse.com/ CSE-Podcast-Bill-Besenhofer
38
|
THE FUTURE OF FOOD ISSUE
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
|
39
FOOD COMPANIES
LISTED ON THE CSE
Making space at the table for innovation and entrepreneurship FOOD PRODUCERS
AFI
AFFINOR GROWERS
ARGO ARGO LIVING SOILS
BITE
BLENDER BITES 40
|
THE FUTURE OF FOOD ISSUE
VEGI
BOOSH PLANTBASED BRANDS
FEEL FEEL FOODS
JSDA JONES SODA
PLCN CANNIBBLE FOOD-TECH
LLP
LEANLIFE HEALTH
YUM
KOMO PLANTBASED FOODS
MEAT
MODERN PLANTBASED FOODS
MEAL NABATI FOODS GLOBAL
NPRA NEPRA FOODS
PBF
PLANET BASED FOODS GLOBAL
VEGN PLANT & CO. BRANDS
MILK PLANT VEDA FOODS
FUEL
PLANTFUEL LIFE
COMPANIES SUPPORTING FOOD BRANDS
FRSH THE FRESH FACTORY
GFCO THE GOOD FLOUR CORP
TYUM
THE YUMY CANDY COMPANY
VAGN
VEGANO FOODS
ZOG
ZOGLO’S INCREDIBLE FOOD
GOAT
BILLY GOAT BRANDS
CULT
CULT FOOD SCIENCE
EATS
EAT BEYOND GLOBAL HOLDINGS
EWG
EAT WELL INVESTMENT GROUP
EMRG
EMERGENCE GLOBAL ENTERPRISES
VEJI
VEJII HOLDINGS
CANADIAN SECURITIES EXCHANGE MAGAZINE MARCH 2022
|
41
SPOTLIGHT ON CSE’S
MARK FRANCIS
Discussing mentorship, the future of food, and what’s unique about Western Canada By Nikki Manthey
How did your career in the capital markets begin? Back in 1980/81 Pitfield Mackay Ross Winnipeg needed a back office clerk. I was good at doing math in my head so ended up calculating and writing margin calls, which didn’t make me all that popular, at least at first, among the brokers. Eventually they realized that this discipline protected both them and their clients.
Who do you consider a mentor or inspiration? Vincent Catalano. Vince is highly intelligent, curious about the world, questioning of assumptions, precise in diction and language, determined, and determined to be cheerful regardless of life’s vicissitudes. His mantra was to be firm, friendly, and fair. He was, and is, highly ethical and moral in every sense, but would never virtue signal.
What’s the most important thing you’ve learned during your time with the CSE? That most entrepreneurs are sincere, but feedback other than that which is honest and direct is unhelpful. Also relevant is that being undercapitalized 42
|
THE FUTURE OF FOOD ISSUE
holds companies back in myriad ways. Successful small caps bring in genuine expertise and share the potential win in order to be able to drive on the highway rather than in stop-and-go traffic.
You’re currently based in Alberta. What’s your favourite part about working in Western Canada? Western Canada and the Prairies are forthright, hardworking, and innovative, and value competence over “connectedness.” Conversations are generally direct and frank, including divergence and disagreement, which is far more useful than ones that are “nice” or “in tune.”
Let’s talk about the food industry. What impact do you think the plant-based, clean-label food movement will have on the capital markets? All new industries bring their energy and freshness to the capital markets. This is a vital part of keeping things dynamic and bringing in new people and investors, as well as engaging the general citizenry more broadly in the businesses of our society. In turn, capital markets bring to these new industry verticals a requirement for transparency, the opportunity for experienced investors to challenge early assumptions, and ultimately, discipline and investor accountability.
What do you feel is the CSE’s most significant contribution to the sustainable food sector so far? CSE is a great platform for new companies to find capital for new ideas. As an exchange, CSE doesn’t try to second guess management and its business model. Especially in quickly growing industry verticals, the insiders have a much better understanding of how business must advance. CSE’s regulatory structure allows for timely pivots and business deals in a way these industries need.
Speaking personally, what interests you about the plantbased food, alternative protein industry? Western Canadian farmers have been a major contributor to the production of plant protein in raw form, but to date there hasn’t been capital to allow some key value-added processing to occur here. Most Canadians aren’t aware of just how innovative Canadian agriculture has been for the last century, based on science and economics, including being the leader in the zero tillage movement.
Are there any interesting trends you’ve noticed in the sector? Entrepreneurial creativity identifies and unlocks opportunities and ideas which governments, banking oligopolies, and central planning structures miss. The range is delightful: Use of insect protein and fungus has been burbling under the surface for 10 years and is now getting market traction.
Which CSE event are you most looking forward to this year? Stampede! CSE has a great Pre-Stampede breakfast which, like so many Albertans, contributes to the general spirit and efforts. This year the CSE team will come, most for the first time. Yahoo!
What are you excited about for the rest of 2022? Continued growth and broadening of CSE’s role in the universe of small-cap companies, internationally as well as in new businesses and industries, and the growth and development of our listed companies, many of which are better capitalized than ever before.